Monday, November 18, 2013, 08:05
Bringing China's best minds home to roost
By Alfred Romann in Hong Kong

On the face of it, the fact that more than three times as many Chinese students now go abroad to study compared with a decade ago does not seem to bode well for China's "brain drain" dilemma.

But the tide may be turning. The number of students who return is four times higher now than a decade ago and the government appears to have a renewed eagerness to tackle the problem.

In 2012, some 400,000 students went to study abroad, up from 120,000 in 2003. The Ministry of Education says 330,000 returned last year, up from 80,000 a decade ago. China still has a trade deficit of talent, but it is a much smaller deficit than at any time in decades.

"The Chinese government thought about it as a serious problem after 1987," says David Zweig, a professor at Hong Kong University of Science and Technology who has researched the subject extensively and is now working on a book about returnees.

In 2010, Zweig adds, the issue was taken over by the Coordination Group on Specialists of the Communist Party of China. The goal of this group is to coordinate the myriad efforts in place to bring back talent to China.

Between 1990 and 2010, the Ministry of Education spent close to $98 million in seed funding for about 20,000 returnees.

A program by the Chinese Academy of Science, launched in 1994, offers as much as 2 million yuan ($328,500) for research to returnees. In almost 20 years, almost 1,600 professionals have taken advantage of the plan.

In 2008, China launched the Thousand Talents plan, through which the government tries to convince overseas Chinese to return. The plan offers top scientists and entrepreneurs as much as $150,000 in cash, office and laboratory space, housing allowances and school entry for children.

Another program, the Medium- and Long-Term Talent Development Plan (2010-2020) aims to attract another 2,000 specialists in IT, biotechnology, aerospace, environmental protection, agricultural technology and transportation.

China still has a huge imbalance with more developed Western countries, in particular the United States, says Wang Huiyao, director-general of the Center for China and Globalization, based in Beijing. It is not only about attracting students who have gone abroad to study, it is also about attracting more international students who can provide a booster shot of innovation and entrepreneurship.

China is now offering more permanent residency permits to attract talent, taking a different approach to combat the ongoing brain drain. The number remains relatively small but it is growing. In 2012, authorities issued 1,202 permits, 83 percent more than a year earlier, according to Zheng Baigang, head of the Bureau of Exit and Entry Administration at the Ministry of Public Security. The majority of the applications came from the US, Japan, Canada, Australia and Germany.

But it is hard to tell how effective these programs truly are at bringing back top talent. There have been criticisms of poor management, particularly in city level programs. At times, "returnees" who have taken advantage of programs were already back in China but were enrolled to shore up the numbers. At other times, the people offered spots in these programs did not necessarily fit the bill.

Quality can be an issue. The lower end of the talent spectrum tends to swell the ranks of the returnees. Weak students, often supported by their parents after they come back to China, return in droves. The best and the brightest are often hired in the US and Europe. Luring these candidates back is expensive.

In a 2008 survey, Duke University in the US found that half of 637 returnees polled had five years or less of experience in the US. They were hardly top executives.

The issue is made more pressing by the fact that business and investors regularly complain of shortages of top-tier talent, particularly high level executives or researchers across a variety of industries from logistics to biotechnology.

Since 1978, more than 2.6 million students have left China to study abroad; only 1.1 million have returned, according to China's Ministry of Education.

But as China grows, quality of life improves and salary levels rise, more students who left to study are coming back. In 2011, there were as many as 186,000 returnees, about 40 percent more than in 2010, according to the Ministry of Education.

At the same time, a greater percentage of students who go out to study do so with the intention of returning once their studies are over, says Zweig.

"Now it is about 50 percent of people going out who are coming back, but most of them are going for a one or two year (master's)," he says.

That is not really brain drain. Brain drain, he explains, is when an entire graduating class at one of the top schools such as Peking University or Tsinghua University in Beijing goes out of China to do PhDs.

And the tide may also be shifting among Chinese professionals who studied, trained and worked abroad. Some have returned, often lured back by the improving quality of life, increasing prospects and greater opportunities, particularly since the global financial crisis and the slowdowns in the US and Europe.

Many of those who leave are finding that there are fewer opportunities than in China, says Huang Jing, professor and director of the Centre on Asia and Globalization at the Lee Kuan Yew School of Public Policy in Singapore.

"They don't have an advantage and the economies in the US and Europe are not doing as well," says Huang. "I would stick my neck out and say that the 'brain drain' will become less of an issue."

For China Business Weekly